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November 29, 2004

Northern Trust, MassMutual to Buy BAM Units

CHICAGO (HedgeWorld.com)--Northern Trust Corp. bolstered its European fund services capabilities Monday by acquiring the administration, custody and trust services units of Baring Asset Management's Fund Services Group in a deal valued at approximately US$480 million.

ING Group NV, Amsterdam, The Netherlands, which owns Baring Asset Management, also said it would sell BAM's asset management business to Massachusetts Mutual Life Insurance Co.,* Springfield, Mass. Terms of that deal were not disclosed.

Northern Trust officials said the acquisition of the BAM businesses fits in well with Northern Trust's European expansion plans. The deal, they said, would complement Northern Trust's fund services businesses in London, Dublin and Luxembourg.

"The scope of FSG's business will significantly enhance and expand our global fund administration capabilities, as well as our growing hedge fund, private equity and property administration capabilities," said William A. Osborn, chairman and chief executive of Northern Trust, in a statement.

The new administration and custody assets of BAM's Fund Services Group would place Northern Trust in the top-five group of fund administration and custody providers in Dublin, according to Northern Trust officials.

BAM's Fund Services group currently employs 770 people in offices in London, Dublin, Guernsey, Jersey and the Isle of Man. A Northern Trust spokesman said any job losses as a result of the merger would be minimal and accomplished through attrition as opposed to layoffs. He said BAM would move its Fund Services Group into Northern Trust's Canary Wharf offices in London. That office will become the headquarters for the larger international asset servicing business. The other offshore centers will remain in operation. The two firms' offices in Dublin would be combined under one roof.

In a related move, MassMutual,* with US$300 billion in assets under management, bought BAM's US$32 billion asset management business. Also subject to regulatory approval, the BAM business will continue to operate independently, much like other MassMutual investment companies, including OppenheimerFunds Inc., Antares Capital Corp. and Babson Capital Management LLC.

*MassMutual also is the majority owner of OppenheimerFunds Inc., New York, whose parent, Oppenheimer Acquisition Corp., also operates Tremont Capital Management Inc. Rye, N.Y. as a wholly owned subsidiary. Tremont is a strategic partner of and a minority investor in HedgeWorld.